Singapore's first liquefied natural gas terminal has received its first commercial cargo, putting the island country on course to become a major gas trading hub.

The Singapore Ministry of Trade said the $1.7 billion terminal will allow Singapore to access competitively priced gas globally.

The cargo, from BG Group, was sourced from Equatorial Guinea in Africa, Channel News Asia reports.

The two-tank plant will have an initial throughput capacity of 3.5 million tons per year. That is expected to increase to 6 mtp by the end of this year after a third tank, additional jetties and other plant facilities are completed. The LNG will be re-gasified before delivery to customers.

"We look forward to serving our customers and the nation in time to come as Singapore grows to become a gas hub for the region," said Neil McGregor, chief executive of Singapore LNG Corp., operator of the terminal, adding that the massive infrastructure was completed on time.

Construction on the facility began in 2010. The government announced the project in 2006.

While about 80 percent of Singapore's electricity is generated from natural gas as fuel, the government aims for electricity to be increasingly generated from gas-fired, combined-cycle power plants. Singapore has been relying on imports from Malaysia and Indonesia via pipelines.

"Energy diversification is an important part of Singapore's strategy for energy security and resilience," S Iswaran, second minister for Trade and Industry, said in a release. "The LNG terminal is a key infrastructure to achieve this objective. It will also contribute to the development of Singapore as a regional gas hub, catalyze LNG-related business opportunities and create new job opportunities for Singaporeans."

In a report in Singapore's The Edge, Singapore LNG Corp's McGregor said Singapore is ideally situated between the gas-exporting Middle East and gas importers such as China or Japan.

After making stops to those countries, ships will be able to refill in gas-producing areas such as Australia, Brunei or Indonesia, and trade with Singapore on their way to the Middle East.

While there will be as many as 50 LNG terminals across the region within the next few years, McGregor said "we will be the biggest and offer connectivity between all these ports."

The International Energy Agency has said that constraints to the development of gas markets in Asia, which is on course to become the world's second largest gas market, have included the region's lack of a trading hub to facilitate the exchange of natural gas.

While Malaysia, Indonesia and Thailand have existing terminals or facilities in the works, the Singapore terminal has the ability to import and export LNG, Max Gostelow, association editor of Asia LNG at Platts told CNA.